Asia-focused Standard Chartered plc is in final talks with Securities Trading Corp of India to buy a 49 per cent stake in UTI Securities to complement its private banking business, an executive said.
The deal would help Standard Chartered expand its range of services for wealthy customers in India, which is one of the fastest-growing private banking markets in the world.
"The UTI transaction is in final due diligence," Peter Flavel, global head of private banking, told Reuters on Monday.
Flavel said Standard Chartered wants to eventually increase its stake in the Indian securities broker to 70 per cent, adding that the broking services would be made available to private banking and other clients.
The Financial Times reported on Monday that the 1.4 billion rupee ($35 million) purchase marked Standard Chartered's return to retail stock broking in Asia for the first time in more than a decade.
Flavel, who was speaking at the launch of Standard Chartered's private banking services, said its existing wealth management business -- which caters to individuals with investable assets of below $1 million -- is growing strongly.
This business contributed nearly $2 billion in revenue last year, or 40 per cent of consumer banking business. The new private banking business, which is headquartered in Singapore, caters to customers with $1 million to $50 million.
As part of its expansion, Flavel said Standard Chartered would hire 200 to 300 private bankers worldwide over the next two to three years, bringing the total to between 350 and 450 by the year 2010.
He did not disclose how much the bank would invest in its private banking business, but said it would be "materially accretive" to the bank's earnings by 2009 after two years of investment.
Standard Chartered and other banks are increasingly focusing on the private banking business because of the rapid rise in the number of wealthy individuals, particularly in Asia.
The sector is dominated by big international players, including UBS, Citigroup, and HSBC.